This article first appeared in The Edge Malaysia Weekly on January 17, 2022 - January 23, 2022

With Bank Negara Malaysia likely to keep its key overnight policy rate (OPR) unchanged this Thursday (Jan 20) despite inflation inching higher, investors’ attention would likely turn to the 2022 Davos World Economic Forum being held virtually for a second year in a row due to the pandemic.

Chinese President Xi Jinping is expected to address the forum from Beijing when the five-day summit kicks off on Monday (Jan 17) to discuss global challenges, including strengthening global value chains, bridging the vaccine gap, rebuilding fragile economies as well as accelerating efforts towards net zero. Other leaders attending the event include Indian Prime Minister Narendra Modi, Japanese Prime Minister Kishida Fumio, Australian Prime Minister Scott Morrison, EU President Ursula von der Leyen and US Treasury secretary Janet Yellen.

Back in Malaysia, the Department of Statistics will release the Consumer Price Index (CPI) reading for December on Friday (Jan 21). Bloomberg pegs inflation at 3% year on year from 3.3% in November.

The markets will be closed here on Tuesday for Thaipusam.

Over at the courts, on Monday, the Kuala Lumpur High Court will hear an application by Serba Dinamik Holdings Bhd for an injunction to halt Bursa Malaysia Securities Bhd and Ernst & Young Consulting Sdn Bhd (EY) from releasing a report on the findings against the company. In November, the court rejected Serba Dinamik’s request for an ad interim injunction but allowed the request for an adjournment of the hearing of the injunction application to respond to the affidavits filed by Bursa and EY.

Also on Monday, the Court of Appeal will hear the continuation of a defamation suit by Datuk Seri Anwar Ibrahim against Minister of Health Khairy Jamaluddin over the latter’s “main belakang” remark during a ceramah in 2008. In November, Khairy’s lawyer Tan Sri Muhammed Shafee Abdullah told the court that Khairy can rely on the defence of justification that Anwar Ibrahim is a homosexual based on a Federal Court opinion in 2004. In 2017, the High Court had ruled in Anwar’s favour and awarded him RM150,000 in general damages.

On Wednesday, The Federal Court will hear a motion by the residents of Taman Tun Dr Ismail (TTDI) to adduce fresh evidence in the Taman Rimba Kiara appeal. The appellants Memang Perkasa Sdn Bhd (a subsidiary of Malton Bhd), Kuala Lumpur City Hall (DBKL), Yayasan Wilayah Pesekutuan (YWP) and Bukit Kiara longhouse residents, are appealing for the reinstatement of a development order (DO) for the proposed Taman Rimba Kiara project.

TTDI residents have been against the mixed-use development project on a 25-acre public park site in the neighbourhood and last January a three-member Court of Appeal unanimously ruled that the DO was null and void. 

Across the Causeway, UOB expects attention to be on Singapore’s Budget 2022, particularly the timeline for the increase in GST to 9% from 7%.

A slew of monetary policy decisions will be made by central banks this week in Asia, starting with The Bank of Japan (BoJ) on Tuesday. UOB does not expect any major policy changes in the January meeting as the near-term growth outlook is uncertain given the latest surge in Covid-19 infections owing to the Omicron variant in Japan and globally.

“We think the BoJ may slightly revise economic growth forecasts higher to take into account the latest fiscal stimulus while inflation forecasts may also be revised higher due to the higher commodity prices and Covid-19-related supply disruptions and logjams,” UOB adds. 

Whereas, Bank of Indonesia is expected to maintain its interest rate when it meets on Thursday, UOB says. Since inflation remains between 2% and 4%, the central bank will have the policy space to remain accommodative to support the economic recovery. “We keep our BI rate forecast to stay at the current level of 3.5% in the near term and (for the bank) to start hiking its benchmark interest rates in the latter half of 2022.”

On the same day, China’s January one- and five-year loan prime rate (LPR) fixing will be announced. The research house foresees another 10 bps cut to the one-year LPR to 3.7% by end-2Q2022. “We do not expect it to happen back-to-back in January,” it says.

It will be a short week in the US as its financial markets will close on Monday, Jan 17, for Martin Luther King Day. 

Some 364 US companies will release their quarterly earnings from Jan 18 to 21; 38 are Standard & Poor’s 500-listed firms. UOB points out that of the 38, “early attention will be on the remaining major banks before turning to airlines, chipmakers and tech companies”.

Meanwhile, the Federal Open Market Committee blackout period will start on Saturday, Jan 15, ahead of the Jan 25/26 meeting of the FOMC. 

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